Domestic travel insurance

Many New Zealanders don’t think about getting travel insurance for a domestic holiday. However, there are some significant benefits to covering your New Zealand explorations that you’ve probably never thought of. What’s more, cover for domestic travel is surprisingly cheap.

This article provides a high-level summary of what domestic travel insurance typically offers. It can help you identify what’s important for you, before you shop around or dive into the detail of individual policies.

Why do people get domestic travel insurance?

New Zealanders have free access to hospital care for acute illness and ACC cover for accidental injuries. If you have contents insurance, it normally covers your belongings when they’re with you anywhere in the country. So why would you need domestic travel insurance?

Below are some of the main benefits that might make you think it’s worthwhile. Each benefit will have a maximum pay-out limit that’s specified in your policy, however higher limits can usually be arranged for an extra charge. There are also exclusions and rules about when each benefit does and doesn’t apply, so it’s important to read your policy carefully.

  • Cancellation: If you have to cancel your entire trip or just part of it for an unforeseen reason, this benefit will cover non-refundable costs. Note that cancellation doesn’t include simply changing your mind.
  • Travel changes: If something unexpected means you have to alter your travel plans, this benefit will cover the extra costs involved. The costs need to be reasonable; you won’t be covered for a penthouse suite when standard rooms are available, for example.
  • Travel delays: If your pre-arranged travel is delayed or you miss a connection due to a travel delay or cancellation, this benefit will cover reasonable expenses, including accommodation and public transport if required.
  • Luggage delays: If your checked bags are delayed for more than a set time, such as 12 hours, this benefit will cover the cost of buying essentials like toiletries and necessary clothing.
  • Lost or damaged possessions: If you don’t have contents insurance, this benefit will cover theft, loss and damage to your belongings. The insurer can decide whether to repair, replace or pay-out in each case. They usually take depreciation into account, which means current value rather than the cost of brand new items.
  • Rental vehicle excess: If you have to make a claim on the insurance policy in your rental agreement, this benefit will cover the excess (contribution) you have to pay.
    Urgent medical care: Even though acute hospital care is free in New Zealand, there can still be costs involved in seeing a doctor or dentist if you’re injured or become unexpectedly ill. Most policies will cover your bills up to a specified limit.

Comparing domestic travel insurance policies

Every policy is different, particularly when it comes to the finer details. This means comparisons can take time. On the plus side, comparing policies makes it easier to get the right cover for you and your travel.

Apart from price, here are some of the main areas where the policies will differ.

  • Included benefits: Apart from the common types of cover mentioned above, each policy can have unique benefits, such as paying for extended childcare or pet care if your return home is delayed.
  • Pay-out limits: As we mentioned above, most benefits have a maximum pay-out limit, although some can be unlimited. There are also sub-limits. For example a policy that offers up to $30,000 cover for personal items will probably have sub-limits for certain items, such as up to $3,000 for jewellery or $1,000 for a mobile phone.
  • Excess values: An excess is the contribution you agree to make towards any claim. The insurer subtracts it from their pay-out. You can often request a higher excess in return for a lower premium and vice versa. Some benefits, such as rental vehicle excess cover and personal injury cover, typically have no excess.
  • Exclusions: These are situations where your insurance will not apply. There are usually long lists of specific exclusions in any policy. Some are common to most policies, while others can be less common. It always pays to read the fine print carefully. Apart from more obvious exclusions, like claims arising from illegal activity and being drunk, you’ll often find exclusions like black water rafting, scuba diving, hitch-hiking, and paid or voluntary manual work. Some exclusions, like snowboarding and skiing, can often be removed in return for paying a higher premium.

Pre-existing medical conditions

The term ‘pre-existing conditions’ refers to any symptoms, injuries and illnesses you knew about or reasonably should have known about when you applied for the policy and before you departed on your trip. Most policies won’t cover any claim that’s related to a pre-existing condition, unless it’s listed as a covered condition in your individual policy document. Pre-existing conditions can sometimes be covered if you’re willing to pay a higher premium. To do this you’ll usually be asked for a medical assessment and a declaration of all pre-existing conditions. Talking to an insurance broker who deals with most of the main insurance companies can make it easier to find an insurer who’s more likely to cover your condition.

Cruises and domestic travel insurance

Most domestic and international travel insurance policies will not include cover while you’re on a cruise ship, even if it stays in New Zealand waters. However, you can often pay for cruise ship travel insurance as an add-on or separate policy.

Is domestic travel insurance worth it?

This usually depends on how you feel about taking risks and the nature of your trip. If you plan to spend quite a lot on flights, accommodation and pre-booked activities, then it’s almost certainly worth getting domestic travel insurance.

If you’re hiring a rental vehicle, most travel insurance policies cover the rental insurance excess. That means you don’t need to pay extra to reduce the excess. What’s more, the cost of travel insurance might be less than the cost of lowering the rental insurance excess – plus you’ll get all the other travel cover benefits.

If you’re just visiting friends or family and staying with them, you might not see the same value in domestic travel insurance. Just keep in mind that having to book new flights at the last minute can be surprisingly expensive.

Some domestic airlines offer basic travel insurance at a very good price if you buy it when you make your booking. For example, Air New Zealand has been offering domestic ‘essentials’ travel insurance from Cover-More for just $20 per person with a return journey booking, or $10 with a one-way flight. Their cover includes rental vehicle insurance excess cover of up to $6,000, and a maximum of $500 cover if your mobile phone or laptop is lost or stolen. You can read the full policy details while booking online.

To learn more

DISCLAIMER: The information contained in this article is general in nature. While facts have been checked, the article does not constitute an insurance advice service. It is only intended to provide education about the New Zealand insurances sector. Nothing in this article constitutes a recommendation that any type of insurance cover is suitable for any specific person. We cannot assess anything about your personal circumstances, all of which are unique to you. Before making insurance decisions, we recommend you seek assistance from an insurance adviser or expert.

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